Charities and the

1
Introduction

• Charities - and the
• Role of Revenue
• By
• Gerry OFlynn

2
Presentation Content

• Revenues Role
• Bodies Eligible to apply for tax exemption
• Scale and Types of exempt bodies
• The relieved Taxes
• Applying for exemption
• Exemption Conditions
• Scheme of Tax Relief on Donations
• Relevant Contacts

3
Revenues Role and Involvement with Charities

• Charities Act 1961-no charity definition
• Sn. 207, Taxes Consolidation Act, 1997 current
  main exemption provision
• Exempt from most taxes except VAT PAYE
• The CHY imprimatur
• Revenue Website List of Exempt Charities
• No Regulatory Function we monitor charities
  only to ensure that exemption continues to be
  warranted

4
What Bodies are eligible to apply for Exemption
?

• Not-for-Profit Organisations vs. Charities
• Public Benefit Test for Charities
• What benefit ?
• Who are the beneficiaries ?
• Is the benefit direct or incidental ?
• Other key concepts that determine eligibility
  e.g. establishment, altruism, educative content,
  belief in a superior being, non-lobbying,
  legality etc.
• Right of Appeal to the Appeal Commissioners if
  exemption refused

5
The Taxes that are relieved for Exempted Charities

• Income Tax Sn.s 207 and 208, TCA 1997
• special conditions attaching to trading
  activities by Charities
• Corporation Tax Sn. 76, TCA, 1997
• Capital Gains Tax Sn. 609, TCA, 1997
• CG Clearance Cert necessary where asset exceeds
  500,000
• DIRT Sn. 266, TCA, 1997
• CHY No. to banks for gross interest to be paid
• Claim Form 68 to Charities Sn. for DIRT refund
• Stamp Duty Sn. 82, Stamp Duty Consolidation
  Act,1999

6
The Taxes that are relieved for Exempted
Charities ( contd.)

• Dividend Withholding Tax (DWT) Sn. 172C (2) (e)
• composite resident form for at-source
  exemption
• Professional Services Withholding Tax (PSWT)
• At source exemption w.e.f. 25th March 2005

7
The Taxes that are relieved for Exempted
Charities (contd.)

• Capital Acquisitions Tax (CAT) Sns. 17, 22 and
  76, CAT Consolidation Act, 2003
• Gift Inheritance , Probate tax,
  Discretionary Trust Tax
• N.B. - No exemption for PAYE, PRSI or VAT
• No. of specific VAT reliefs e.g. humanitarian
  aid, purchase of medical equipment etc. CHY 10
  Leaflet
• Tax Clearance for Charities
• -

8
Applying for Exemption

• CHY 1 Explan. Leaflet sets out requirements
• Bodys Governing Instrument
• 4 Standard Revenue Clauses
• Statement of Activities
• Accounts
• Details of Trustees / Directors

9
Conditions attaching to Exempt Bodies

• Application of funds to charitable purposes only
• Maintenance of records and accounts to Revenue,
  on request
• Prior approval of Revenue for any substantive
  changes to Gov. Instrument
• Accumulation of funds Revenue approval
• 18 Month reviews
• Long term reviews

10
Scheme of Tax Relief on Donations to Charities
etc. from 2001 onwards

• Contained in Sn. 848A of the TCA, 1997
• Replaces / Consolidates 12 former reliefs
• Full Details in Explan. Leaflet CHY 2
• Main Features
• - 250 minimum donation no maximum unless
  associated with the charity when 10 cap applies
• Charities ( 2 years exempt) and Approved Bodies
  (schools etc.)
• Tax relief is at marginal rate
• Charities recover tax on PAYE ONLY donations
• - Self Assessed and Companies claim the
  relief in their tax returns

11
Relevant Contacts in Revenue

• Charities Section, Revenue Commissioners,
  Government Buildings, Nenagh, Co. Tipperary
• Ph. 067-63400 E-mail
  charities_at_revenue.ie
• Stamp Duty Adjudication Section, Customer Service
  Unit, Dublin Castle
• Ph. 01-6792777 Extns. 48552/3
• VAT Repayments Section, Acct. Genls. Office,
  Revenue, Govt. Offices, Ennis, Co. Clare
• Ph. 065-6841200

12
Relevant Contacts ex Revenue

• Charities Regulation Unit, D/Community, Rural and
  Gaeltacht Affairs, 43-49 Mespil Road, Dublin 4
• LoCall 1890-47847
• Email www.pobail.ie
• Commrs. Charitable Donations Bequests, 12 Clare
  St., Dublin 2
• Ph. 01-6766095